3 Applying the lessons from Pathways
16. Pathways performance has not been in line with
expectations and its precise contribution to a reduction in the
volume of people claiming incapacity benefit cannot be measured.
The Department made a number of mistakes in the Pathways to Work
programme that must be avoided in future programmes. It reported
that is making a number of improvements ahead of the new Work
Programme, drawing on its experience of Pathways.
17. The methodology used by the Department to assess
the impact of the programme in pilot areas was flawed because
it sampled people who made an inquiry about claiming incapacity
benefits, not those who actually went on to claim.
This meant that the Department was not able to tell what the employment
impact of Pathways for actual claimants was prior to the national
roll out of the programme. At the time of the evaluation, the
Department said that it had no reason to think that there would
be a difference between the two groups,
a view shared by its evaluation panel at the time.
18. The Department accepted, with hindsight, it should
have evaluated the Pathways pilot to include both those who enquired
about incapacity benefits and those who actually started on the
benefit. The Department
nevertheless believes that it took a sound and responsible decision
in rolling out the Pathways programme nationally.
Having a more realistic approach to evaluation sampling and more
thorough piloting would have provided a stronger basis on which
to assess the cost effectiveness of a programme that has so far
cost in excess of £750 million.
19. In 2008-09 some £94 million was spent on
additional support through Pathways for new incapacity benefits
claimants, but this did not increase the likelihood of someone
finding work. The
Department did not indicate when it intends to stop spending money
on these elements of additional Pathways employment support but
accepted that they have not added value and that lessons need
to be learnt for future employment support delivered in the Work
Programme. Only the early medical assessment introduced as part
of Pathways and now incorporated into the Employment and Support
Allowance, and the prospect of a more active process requiring
claimants to participate in work focused interviews whilst in
receipt of benefits appears to have reduced claimant numbers.
20. Failure to attend a Pathways work-focused interview
for those claimants who are required to participate in the programme
can lead to a benefit reduction of around 25%. In contrast to
Jobseeker's Allowance, the Department does not hold reliable data
on the proportion of incapacity benefits claimants who are 'sanctioned'
in this way, and this is a significant weakness.
The Department recognises that the rate of sanctioning is low
but the absence of robust data gives no reliable basis for exploring
why that might be the case.
It is therefore impossible to determine the impact of sanctions
on this claimant group. The Department agrees that this is a weakness
and is something that it needs to examine further to inform the
design of the Work Programme.
21. The Department also needs to counter the risks
of providers investing resources in 'easier to help' claimants
in order to receive outcome payments,
and should do more to create the right incentives to providers
to help all claimants find work. Providers and the Department
agree that a model of differentiated contract payments, in which
outcome payments vary according to how difficult a claimant is
to support back into work, would offer a better incentive structure.
The effectiveness of this approach depends on being able to devise
a model which accurately costs and predicts likely claimant behaviour,
something the Department has not yet been able to do.
Although the Department has learnt a lot about claimant behaviour
from Pathways, it is essential that changes to the payment model
are not made to the detriment of value for money.
22. The Department requires Pathways providers to
retain documentary evidence for all the jobs they claim to have
achieved, but checks only a 10% sample.
Whilst the Department believes it has improved the level of control
over provider payments in recent years, the level of checks appears
insufficient given the risks and value of payments.
There is no independent validation of payment claims with the
employer or claimant, and no routine basis for reviewing the rest
of a contractor claim where an error in the 10% sample of claims
is found. This leaves
a significant gap in the controls in place to detect erroneous
or fraudulent claims by providers.
23. Prime providers have referred only 12% of participants
to their subcontractors, choosing to work directly with the remaining
88% This concentration
of work with prime providers does not appear consistent with the
Department's commissioning strategy and its objective of maintaining
a healthy welfare-to-work supplier market.
The Department accepted that it needed to learn lessons about
the treatment of subcontractors and its 'line of sight' to subcontractors
delivering frontline services, though it remains adamant that
its principal relationship is with the prime provider.
The Department is now asking organisations bidding for contracts
under the Work Programme to provide, at an early stage, much more
detailed information on their supply chain policy and experience.
Recognising this as a gap, the Department has introduced a new
accreditation system ('Merlin') to set out its expectations for
supply chain management and to grade providers according to their
24. Significant progress in reducing claimant numbers
appears dependent on the introduction and roll out of the new
medical assessment for all incapacity benefits claimants. Around
38% of new claimants have so far been found capable of work and
not eligible for the Employment and Support Allowance, potentially
increasing the volume of claims for Jobseekers Allowance.
The Department plans to pilot the new medical assessment with
existing claimants in Aberdeen and Burnley later this year, before
rolling it out to all existing claimants by 2014. It is important
that the Department understands fully the impact this roll out
might have on claims for other benefits and the capacity of Jobcentre
Plus to process these in light of the Government spending review.
Until piloting work is complete, the Department admits it does
not know precisely what proportion of existing claimants who are
re-assessed will go on to claim Jobseeker's Allowance where they
are found 'fit for work' under the new assessment criteria.
25. A measure of the success of the new medical assessment
will be the level of benefit appeals which result in the Department's
decision being overturned. The Department reported that around
one in three claimants has so far appealed against its decision
to disallow the benefit, with fewer than half (40%)
being successful on appeal.
This represents a significant proportion of claimants whose appeal
is upheld and the Department should look to reduce this rate over
time, in particular, monitoring rates for existing claimants who
are due to be re-assessed against the new criteria.
26. Claimants who do not qualify for incapacity benefits
may transfer to Jobseeker's Allowance. These claimants are likely
to require more targeted interventions, given that many will have
been claiming incapacity benefits for a long time and may need
additional support to find work.
There remains a risk that these claimants will be transferred
from one benefit to another rather than finding work and leaving
40 Qq 126-129, 134, 158-159 and 166 Back
C&AG's Report, para 11 Back
Qq 136-138 Back
Qq 163-164 Back
Qq 141-142 Back
Qq 150, 161, 164 and 179 Back
C&AG's Report, para 29 Back
Q 150 Back
Q 168 Back
Q 169 Back
Qq 168-170 Back
C&AG's Report, para 4.13 Back
Qq 18, 89-92, 107-108, 123-124 and 131 Back
Q 134 Back
Q 133 Back
Q 170 Back
C&AG's Report, para 4.3 Back
Qq 18 and 170 Back
Qq 98-99 and 154; C&AG's Report, para 4.7 Back
Q 154 Back
Qq 171-172 Back
Q 154 Back
Qq 155-156 Back
C&AG's Report, para 26 Back
Qq 151, 185-186 and 189 Back
Q 152 Back
Employment and Support Allowance: Work Capability Assessment:
Official Statistics, July 2010 at: http://research.dwp.gov.uk/asd/workingage/esa_wca/esa_wca_27072010.pdf?x=1 Back
Q 184 Back
Qq 182 and 183 Back
Q 184 and 188 Back